September 23, 2011 / 11:26 PM / 9 years ago

UPDATE 1-UAW, Ford lay groundwork as contract talks deepen

* ‘High level financial discussions’ Monday at Ford-UAW

* Workers at Ford expect more generous terms than GM deal

* Chrysler, UAW continue talks; CEO and UAW president meet (Adds detail on talks between Ford, Chrysler and union)

By David Bailey and Ben Klayman

DETROIT, Sept 23 (Reuters) - United Auto Workers and Ford Motor Co (F.N) officials on Friday were setting the stage for financial talks next week that workers expect to yield a deal that will be richer than one with General Motors Co (GM.N).

The union and Ford laid the groundwork for the next stage of negotiations on Thursday and Friday with the expectation that negotiations were accelerating and “high level financial discussions” would begin Monday, according to the union.

Teams of negotiators for the union and Ford, the only U.S. automaker to avoid bankruptcy, have been meeting for about two months. Financial issues typically are addressed in the final stages of negotiations.

The union began an intense focus on Ford a day after the UAW, failing to finalize a deal with Chrysler Group LLC, extended its contract with the Fiat FIA.MI-controlled automaker until Oct. 19.

Chrysler Chief Executive Sergio Marchionne and King met on Friday and “productive discussions are ongoing,” the union and the automaker said in a joint statement.

One issue Chrysler and the UAW could not agreed on was the number of workers paid the entry-level wage of about $15 an hour, about half the rate members had been traditionally paid, said a source familiar with the talks who asked not to be identified. The automaker wants no limits on the number of such workers it can use, while the union wants a cap.

Chrysler has sought a cost-neutral contract, which would require wage increases for entry-level workers to be offset by higher worker healthcare contributions or in other areas.

Healthcare costs, then, would be one area in which a Chrysler agreement would differ from the tentative GM deal.

Meanwhile, UAW-represented workers have begun voting on a tentative four-year deal reached a week ago with GM. Union officials hope to wrap up that voting by Thursday. At least three locals have voted to approve the contract so far.

The GM contract would keep or create more than 6,000 factory jobs, raise wages for entry-level workers and guarantee all workers bonuses of at least $11,500 over four years.

The Detroit labor talks will set wages and benefits for about 112,500 unionized autoworkers and establish a benchmark for wages at auto parts suppliers and nonunion plants run by Asian and German automakers.

New four-year contracts for GM and Chrysler workers would be the first since those two companies were bailed out by the Obama administration in 2009. UAW-represented autoworkers have gone without a base pay increase since 2003.

The uncertain outlook for auto sales in 2012 and the risk of a renewed U.S. recession have made the Detroit automakers reluctant to offer traditional wage increases. Also, GM and Chrysler UAW workers gave up the right to strike for these contract negotiations as part of the government bailout.

The talks with Ford, playing out at its Dearborn, Michigan, headquarters, also known as “the Glass House,” will be patterned roughly after the deal that covers 48,500 GM workers. King met with Ford officials on Friday as well as Chrysler.

Ford’s roughly 41,000 UAW-represented workers have the right to strike and the highest expectations for wages and bonuses because of the automaker’s performance. The UAW has not had a strike at Ford since 1976.

An unsettled grievance could complicate talks. The union has said Ford broke a pledge to treat workers equally when it restored raises and 401(k) matches for white-collar workers without making a similar payout to factory workers.

There is also simmering resentment among UAW workers over Ford Chief Executive Alan Mulally’s compensation last year of $26.5 million, which King previously called “morally wrong.”

The union has made job retention and expansion a top goal in the talks. The UAW may seek to have Ford shift work from Mexico to U.S. plants, something it touted in its deal with GM. Ford builds the Fusion mid-sized sedan and Fiesta small car at plants in Mexico, where it also has an engine plant. (Editing by Steve Orlofsky)

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